The Menendez Brothers
Lives of Luxury
Lyle and Erik staged an elaborate memorial service for Jose and Kitty on August 25, 1989 at the Directors Guild of America in Los Angeles. Lyle and Erik arrived one hour late. Erik looked uncomfortable, and his face was red and swollen. Lyle appeared calm and cool. To Lyle, this event marked his arrival in the business world. Up to this moment, the world had known Lyle through Jose's bragging of his accomplishments on the tennis court and his admission to Princeton. Lyle wanted to prove that he was ready to take his place as the head of the Menendez family and he was determined to assert himself as Jose's legitimate replacement.
On August 28, 1989, a traditional church service was held at the university chapel in Princeton. Brendan Scott conducted the service. Scott was the faculty fellow who two years earlier had unsuccessfully assisted Lyle when he was charged with plagiarism. At the service, Lyle spoke for thirty minutes and recalled how much Jose and Kitty had meant to him. Erik was too upset to speak.
Their parents' murders affected Lyle and Erik differently. Erik was unsure whether to begin attending UCLA or devote himself to tennis. Lyle seemed more focused. He decided against continuing with his college education and began to plan for a career in business.
Four days after the murders, the brothers began a spending spree. The brothers' shopping sprees were funded by Jose's personal life insurance policy of $650,000. The brothers spent money on new cars, designer label clothes and jewelry. Three days after the murders, the brothers spent $15,000 on Rolex watches and money clips.
The bulk of the estate's assets were a house on fourteen acres in Calabasas that Jose and Kitty had purchased, but never lived in, and the Beverly Hills mansion. When the loans on both properties were deducted, the value of Jose's real estate was $5.7 million. At the time of his death, Jose owned 330,000 shares of LIVE Entertainment that had been trading around at $20 per share. Added to all of this were Jose and Kitty's personal property and automobiles. The estate Jose and Kitty left was valued at $14 million, Lyle and Erik would each inherit about $2 million after loans and taxes were subtracted.
$2 million is not a small inheritance, but it fell far short of Lyle and Erik's expectations. A friend of Erik's said that the brothers had expected to inherit $90 million. The brothers were convinced that Jose had hidden $75 million in a secret Swiss bank account. Neither brother could explain how Jose could have amassed that type of fortune. According to Erik's friend, it just seemed reasonable to Lyle and Erik that Jose would have accumulated far more than $14 million.
About a week after the murders, Lyle and Erik met with executives at LIVE Entertainment to discuss any assets the brothers might receive from the company. The brothers were surprised to learn that the $5 million "key man" life insurance policy that LIVE had purchased for Jose was not valid because Jose had failed to take the physical examination required by the insurance company. The $15 million "key man" policy that LIVE held in the event of Jose's death was in effect and would give the company its most profitable quarter since the company's inception.
The brothers decided that they could not stay in the Beverly Hills mansion. The brothers told their friends that they moved from hotel to hotel because they feared that the same mobsters who murdered their parents would come after them. Immediately after the murders, LIVE paid an $8,800 bill at the Bel Air Hotel that the brothers ran up. $2,000 of the bill was for room service for the five-day stay. LIVE also paid for limousine rides and bodyguards for the brothers.
After living at various luxury hotels in Beverly Hills, the brothers rented adjoining apartments in the Marina City Towers in Marina del Rey. Lyle's apartment rented for $2,150 per month and Erik's apartment rented for $2,450 per month. The brothers saw a penthouse in one of the towers that they liked for $990,000 and put a down payment on it, but the financing fell through and they were unable to purchase it.
Lyle hired bodyguards to travel with him for several weeks after the murders. Lyle's bodyguards were alarmed when Lyle would jump out of the limousine before it came to a complete stop to shop and spend money. On one occasion, the bodyguards watched as he purchased $24,000 in stereo equipment. On September 4, Lyle told the bodyguards he no longer needed their services because his uncle had contacted someone in the mob and arranged some type of deal. Lyle didn't explain how his uncle, a middle-aged business man from a New Jersey suburb, would go about contacting the mob, or how his uncle managed to remove a sentence of death from his nephews' heads.
The brothers' shopping sprees continued. Lyle decided that he had to have a new car. The red Alfa Romeo that his parents had purchased for him as a high school graduation present and that he never liked had to go. The Alfa was replaced by a much more expensive gunmetal gray Porsche 911 Carrera that cost $64,000. Erik traded in his Ford Escort for a Jeep Wrangler.
By October 1989, Lyle had charged more than $90,000 to Jose's American Express card. He would travel frequently between New Jersey and California on the MGM Grand, an airline that catered to business people with expense accounts, while he was busy trying to establish Menendez Investment Enterprises.
Lyle gathered his friends from Princeton together and made them officers of Menendez Investment Enterprises. He rented an office for $3,000 a month in a Princeton shopping mall and furnished it with expensive furniture. Menendez Investment Enterprises never moved into the suite. The office sat unused and served as a testament to Lyle's ability to create the proper setting. The friends that Lyle asked to join him were Princeton athletes, some of whom, like Lyle, had run into trouble with campus authorities. It was not difficult to see why Menendez Investment Enterprises never got off the ground; all the members were young, inexperienced in business and strangely had only known Lyle for several months. None of the members had any business skills. It seemed as if Lyle played at running a business. He dressed and acted the part, but there was little, if any substance, to anything Lyle did.
Lyle's long time dream was to own a restaurant. He tried to buy Teresa's Pizza; a takeout pizzeria located across from Princeton's front gate but Lyle offended the co-owner and he wouldn't sell. Lyle decided to buy Chuck's Spring Street Café, a snack shop in Princeton that specialized in spicy chicken wings. Lyle paid $550,000 for Chuck's which the co-owner of Teresa's Pizza thought was "ridiculous" because it was only worth about "$200,000." Many people thought Lyle was in over his head, but his uncles authorized the sale and took out a loan against the estate to finance the deal. Lyle's uncles hoped that the restaurant would bring some focus to Lyle's chaotic life. Lyle immediately went to work on Chuck's. He expanded the home delivery hours from 12:00 p.m. to 1:00 a.m. and changed the name of the restaurant to Mr. Buffalo's. Merchants in Princeton thought this was crazy since Chuck's had name recognition that was built up over many years.
After purchasing Chuck's, Lyle announced he wanted to open a second location in a nearby Princeton mall. He was also thinking of opening locations near UCLA and another in New Brunswick, New Jersey, near Rutgers University. Eventually, he wanted to open a new Mr. Buffalo's every two months. Lyle was way ahead of himself. Chuck's/Mr. Buffalo's was losing money because Lyle allowed his friends to freeload off of him.
Erik also was taken advantage of when he tried to sponsor a rock concert at the Palladium in Los Angeles. Erik gave $40,000 to a partner as his half of the payment needed for the concert. The partner disappeared along with Erik's money. Erik decided he wasn't cut out for the business world or for college and would try the professional tennis tour. He hired a private tennis coach for $60,000 a year. Erik and the coach began to travel extensively, staying at expensive hotels and spending whatever Erik thought he needed to sharpen his game.